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October 2014
Issue: July 1, 2012

Solid Facilities Are Key to a Prosperous VFX Industry

By: Marc Bourbonnais
The visual effects and digital animation communities are in the enviable position of witnessing the positive impact of VFX on the box office. We are seeing profits rise continually, with a movie like The Avengers grossing $600M in its first week. The majority of films now include visual effects and CG elements of some sort, even if they aren’t obvious to the audience. However, this incredible growth is accompanied by some pressing and complex challenges for artists, facilities, and studios. These include job security for freelancers, regional discrepancies in healthcare coverage and taxation, problems with underbidding on projects, and the globalization of the industry to mention a few.

Luckily some players in the industry are trying to get conversations going between the studios, facilities, and artists to address this instability. A Bill of Rights, proposed by the VES, was a good start, outlining what they believe we should be able to expect from each other in the work we do together. Others have been addressing the need for the VFX industry to develop a set of standards and practices that would be followed industry-wide. These conversations are essential to settling into the new reality and we need to move forward with them. 

Before we can talk about how advances such as a set of standards or some form of industry trade association could help the industry, we first need VFX facilities that are financially secure, supported by sound management practices and capable of adapting to the rapidly changing landscape. With that strength and stability, we will all be in a better position to collaborate, advocate and organize on behalf of the whole industry. There is every reason for individual facilities to be optimistic in this climate of growth, but we have to be prepared. The keys to this preparation for individual facilities, as I see them, are to have good business practices, adapt to changing markets, embrace globalization, and collaborate on projects with neighboring facilities. These factors were all part of our foundation at Modus FX and key to our rapid and stable growth.

KEYS TO SURVIVAL IN THE VFX INDUSTRY

VFX artists often launch boutique businesses with a contract or two – pricing aggressively on projects to get their foot in the door – but lack a business plan, management capabilities and financing to get much beyond that. They are creative people with computers wanting to make a business out of what they love to do. Along the way we learned some valuable lessons the hard way, one of which is the need for sound financial planning. Equipment and staff costs in this industry are high, and will remain so, making cash flow a challenge for almost everyone in the industry. It can be difficult to get long-term advance agreement on projects. You need to be able to access creative talent quickly, even in lean times, knowing that payment for a project may not come until long after the job is done. All of this means that business partners and investors are essential to a successful VFX facility, since access to capital allows us to weather lean periods and keep focus on our long-term development. At Modus we immediately set in place sound management practices with a robust yet flexible corporate structure with external partners.

VFX facilities need to be versatile in these shifting times. Though high-end VFX work continues to be expensive, hardware costs have come down enough that visual effects are accessible to a much broader market now, such as common commercials, TV series, movies of the week, cinematics for video games, and independent movies. The financial turmoil hit the US soon after we started Modus FX in 2007. When work stopped coming in from California – our primary market – we turned to markets in Britain and France to weather the storm, but this required branching out from feature films to work on documentaries and CGI TV specials. Tapping into these new opportunities requires management of smaller production teams specializing in different types of VFX and digital animation.

Globalization is a trend that has had some unexpected positive consequences for the North American industry. Ten years ago everyone thought that India would storm the market and become a key player, taking work away from facilities here, but that hasn’t been the case. The facilities in India are talented, proficient and professional, but correct supervision and an “artistic language” are also needed and they don’t yet have the visual knowledge that facilities in North America have developed through experience.

India and China now represent opportunities for us. Burgeoning audiences there are getting accustomed to higher production values, and the demand for content is growing dramatically. In some cases, even with all the labor and resources that they have access to, facilities in India and China can’t deliver their own domestic projects and, as a result, it has become feasible for facilities in Canada and the US to bid on Indian films. As a result, we are seeing VFX work out-sourced to India, then brought back to North America and Europe.

Finally, collaborating on projects allows smaller facilities to work together on big projects. The facilities in London’s Soho district have a long history of coming together, as we saw on their work on films such as Harry Potter. They have set an example that the rest of us would do well to emulate. Since Montreal is such a small market, and we have friends at all of the other studios, Modus has become quite good at cooperating with them on big jobs as well. And now it’s easy for facilities in London to collaborate with facilities in Vancouver, Montreal, Sydney or Los Angeles.

ADDRESSING INDUSTRY-WIDE ISSUES

These are the challenges that individual VFX facilities navigate daily. But even as many of us are able to work together, the day-to-day challenges of running a business can prevent us from exploring industry-wide issues. These include globalization and the movement of work to Asia, communication between facilities and studios, regional tax incentives, working conditions, intellectual property rights, high labor costs and low profit margins. There is a need for a forum where facilities can exchange information on best business practices and local situations. This could be done by creating a VFX trade association that promotes existing relationships and enhances collaboration between facilities and regions. Taking the time to look at our mutual challenges, and to develop a set of standards and practices that can be applied industry wide, will benefit our talent, individual facilities, regions, and the studios.

A good place to start would be to clearly delineate professional standards for each role and title in VFX work. For example, what are the tasks that make someone a “VFX supervisor,” and who can legitimately call themselves that? This is a title that should be earned. Also, there is need for clarity about pricing for services. This would benefit everyone in the industry as well as our clients.

Clarity and organization, with a set of professional standards recognized by the film industry, would benefit the studios by removing some of the uncertainty, while also making their costs more predictable. For in the end, the number one concern of our clients is that we will be able to get the job done within time and budget limits.

Versatile and stable facilities tapping into new markets, collaboration and communication between regions, and the creation of a set of industry standards can only lead to greater stability for the VFX industry.

Marc Bourbonnais is president and co-founder of Modus FX, a visual effects facility based near Montreal. He represents Modus FX at the Quebec Film and Television Commission, is a board member of the Visual Effects Society Montreal section and is an active conference speaker. Bourbonnais was recognized with the NAD Centre’s Tribute Award in 2010.